Word: shelterer
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Another questionable aspect of the coal deal, according to the Government lawyers, was its timing. The IRS sharply curtailed this particular kind of tax shelter...
Over the years, Congress has fiddled with the tax code to allow deductions for investments in ventures considered worthwhile but risky, like coal mining, oil drilling and public housing construction. The shelters encouraged the wealthy to invest chunks of income that would otherwise have been heavily taxed. The problem was that in some cases lawyers and accountants found clever ways to make such investments appear much larger on paper than they actually were. In 1976 a major revision of the tax code eliminated some of the most abused shelter provisions...
Operating out of a small, unpretentious office in Newton, Mass., during the early '70s, Osserman and Garfinkle became titans in the tax-shelter business. Osserman, described by associates as the "brains" of the operation, was known to promise new clients that they would never have to pay another dime in taxes. In 1975 the two lawyers joined forces with Producers Meyer and Friedman, whose show-biz connections helped catch the stars as investors. A year later, the group leased 22,000 acres in Wyoming, ostensibly to develop coal deposits. The investors signed notes specifying that for every dollar they...
...told, the Osserman group raked in $20 million in coal investments, only $300,000 of which went to pay for leasing the lands. The rest was dissipated through a network of corporations; part went for commissions to tax-shelter salesmen and payoffs to business associates, part into other deals, and part was used to purchase such assets as a business jet, a Ferrari and several Rolls-Royces. Investigators believe that a sizable chunk of the money may remain salted away in Swiss bank accounts. Further indictments might be handed down against some investors, who knew that the transactions were...
Whatever the outcome of its case, the Justice Department clearly intends these indictments to serve notice that it is cracking down on tax-shelter abuses. But the process is bound to be slow. The Government spent three years gathering evidence on the coal-mining case, which is scheduled to go to trial at the end of March...